What to Watch in the Week Ahead and on Monday, April 18

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WEEK AHEAD
Markets have a number of issues to focus on next week, beginning with the outcome of Sunday's
meeting of oil ministers from the major oil producing nations. But nobody should get their hopes
up all that much for a major change in OPEC's production levels. Earnings will drive markets
after that, with reports expected from plenty of blue-ship stocks including Alphabet, Microsoft,
Coca-Cola, Visa, General Electric and others.
A slew of Dow 30 companies report results next week, including UnitedHealth Group Inc, Johnson &
Johnson, Goldman Sachs Group Inc and the world's largest chipmaker Intel Corp on Tuesday;
American Express Co, the world's largest soda maker Coca-Cola Co on Wednesday; Microsoft Corp,
the No. 1 U.S. wireless phone service provider Verizon Communications Inc, and the world's
largest payments network operator Visa Inc on Thursday, while General Electric Co's and
McDonald's Corp's first quarter earnings are due on Friday. J&J kicks off the earnings season
for large U.S. drugmakers and is expected to report moderately higher earnings, bolstered by
cost cuts and growing sales of its treatments for cancer, arthritis and psoriasis. UnitedHealth
will set the tone for other insurers and investors will be listening for their plans on
Obamacare. American Express is expected to report a decline in profit as it continues to look
beyond cutting costs to improve profit to make up for losing a lucrative contract with warehouse
club retailer Costco Wholesale Corp. Goldman Sachs' profit is expected to be hurt by weak
capital markets, trading revenues and investment banking fees amid uncertainty over U.S.
interest rates, China's slowing economy, and low oil prices. Meanwhile, Intel is expected to
report a rise in revenue beating analysts average estimates, according to Thomson Reuters
StarMine data. Coca-Cola's revenue is also expected to be slightly better than expected,
according to Thomson Reuters StarMine data. Separately, Verizon's profit and revenue is expected
to be in line with analysts' estimates. Microsoft's expected rise in third-quarter revenue is
likely to beating analysts' estimates, according to Thomson Reuters StarMine data. Visa's
second-quarter profit is expected to decline as a volatile global economy and the strong dollar
cut into revenue from customers outside the United States.
Next week, investors will be looking mostly for housing market data, from housing starts,
building permits on Tuesday to existing home sales numbers on Wednesday. Housing starts, as
measured by the U.S. Commerce Department are expected to have dropped to a seasonally adjusted
annual pace of 1.170 million units in March from 1.178 million units in February. Building
permits are likely to have increased to a 1.2 million-unit rate last month. Meanwhile, home
resales probably rose in March after a sharp fall in February. Existing home sales, as measured
by the National Association of Realtors is expected to have gained 3.5 percent to an annual rate
of 5.29 million units. Sales dropped 7.1 percent to an annual rate of 5.08 million units in
February. The Philadelphia Federal Reserve release its business activity index on Thursday,
while on Friday, Markit releases its preliminary data for U.S. manufacturing purchasing
managers' index, which is expected to have advanced to 52.0 in April from 51.5 in March.

Alphabet Inc, on Thursday, is expected to report a rise in first-quarter revenue that is likely
to beat analysts average estimate, according to Thomson Reuters StarMine data. Investors will be
looking for continued growth at Alphabet's Google unit, which has been driven by strong mobile
advertising sales. Investors will also be keen to gather more information on the company's Other
Bets business, which includes glucose-monitoring contact lenses and Internet balloons. Capital
expenditures in the business are expected to increase this year, although no concrete details
have been offered.
Schlumberger is expected to report a fall in first-quarter profit on Thursday, hurt by weak
drilling activity. The world's largest oilfield services provider, which recently closed its
acquisition of Cameron International Corp, warned last month that its revenue would fall by
about 15 percent from the fourth quarter.
General Motors Co will announce first-quarter results on Thursday. GM said on Friday it is
recalling nearly 1.04 million newer pickup trucks for a seat belt flaw. The company said the
recall in the United States includes 895,232 vehicles and a stop-sale of approximately 3,000 new
2014 and 2015 model year pickups still on dealer lots. The recall includes about 142,000
vehicles outside the United States.
BB&T Corp, Fifth Third Bancorp and KeyCorp are likely to report on Thursday a decline in
first-quarter profit as they put aside more money for sour energy loans. Many lenders have
ramped up reserves in recent months, concerned by the increasing number of energy companies that
have gone bankrupt and defaulted on loans as oil prices stay stubbornly low.
U.S. homebuilders including D.R. Horton Inc and PulteGroup Inc report their quarterly results on
Thursday. D.R. Horton and PulteGroup are expected to report a higher profit for the second
quarter and first quarter, respectively, helped by higher home sales.
On Wednesday, Abbott Laboratories is expected to post first-quarter revenue that nudges past
analysts' expectations, after missing estimates for the first time in four quarters in the
previous quarter, largely thanks to forex headwinds. Analysts expect that passage of time and
more stable forex rates will allow the underlying performance of the business to shine through
this quarter, and they will be looking for any commentary on potential M&A activity.
Biogen Inc is expected to report a largely in-line first quarter on Thursday, as prescriptions
written for its multiple sclerosis drug remain unchanged in the United States. Management
previously noted that the uptick in scripts may not be seen until the second quarter. Investors
will also look for more details on the Massachusetts-based drugmaker's hemophilia assets, which
the company is said to be looking to sell.
Yahoo Inc's first-quarter profit is expected to have declined more than analysts average
estimate, according to Thomson Reuters StarMine data. The report on Tuesday comes a day after
the end of a deadline for interested bidders to submit offers for Yahoo's internet business.
There is high investors scrutiny on the auction, which came about as the struggling online
search and advertising company succumbed to investor pressure stemming from its inability to
boost revenue from ad sales.
Advertising group Omnicom Group Inc's first-quarter revenue is expected to fall more than
analysts expect, according to Thomson Reuters StarMine data, due to a strong dollar. When the
company posts its results on Tuesday, investors and analysts will be looking out for Omnicom's
forecast for the second quarter and the full year, as well as details on possible share
repurchases.
Advertising company Interpublic Group of Companies Inc is expected to, on Friday, report a
first-quarter profit that misses market expectations, according to Thomson Reuters StarMine
data. Investors will watch out for any update on financial guidance for the remainder of 2016.
Honeywell International Inc, the maker of aircraft parts and climate control systems, is
expected to report a higher first-quarter profit on Friday, helped by cost controls. Investors
will look for an update on its financial forecast for 2016, and comments on
management-succession plans.
Cessna business jet maker Textron Inc is expected to report a higher first-quarter profit on
Wednesday, helped by steady demand for its planes in North America. Investors will be looking
for an update on its full-year financial forecast and commentary on demand trends in emerging
markets such as Brazil and China, where sales have been weak.
On Thursday, Johnson Controls Inc reports second-quarter earnings amid a pending merger with
Ireland-based Tyco International Plc. The merger of Johnson Controls and Tyco International
would save Johnson Controls $150 million a year in taxes.
Analysts on average expect American Airlines Group Inc, the world's largest airline, to report
on Friday a dip in first-quarter profit due to a new profit-sharing plan with employees.
Investors will zero in on management's guidance for the upcoming peak travel season, as attacks
in Brussels and Paris potentially discourage U.S. vacationers from spending top dollar to visit
Europe in the summer.
Analysts on average expect United Continental Holdings Inc to report a dip in first-quarter
profit on Wednesday, according to Thomson Reuters I/B/E/S. Investors will look for guidance on
how the No.3 U.S. airline will stop its unit revenue decline and improve its industry-lagging
reputation - a concern that activist shareholders raised in a brawl over the company's board of
directors, whom they accuse of poor oversight.
Qualcomm Inc is expected to report a fall in second-quarter revenue on Wednesday, according to
Thomson Reuters StarMine data. The company said in February that its Snapdragon 820 processor
was powering Samsung Galaxy S7 and S7 edge smartphones. Investors will be looking for the impact
of the sales of the Galaxy series on the chipmaker's results.
Data storage products maker EMC Corp is expected to report first-quarter profit below market
expectations on Wednesday, according to Thomson Reuters StarMine data. The focus this quarter
will be on commentary surrounding the Dell Inc deal and outlook for the remainder of 2016.
Advanced Micro Devices Inc is expected to report first-quarter revenue below analysts average
estimate on Thursday, according to Thomson Reuters StarMine data. Investors will be looking for
an update on its Polaris graphic processing units, which it plans to ship in the middle of this
year.
Network equipment maker F5 Networks Inc is expected to report second-quarter profit and revenue
slightly above analysts average estimate on Wednesday, according to Thomson Reuters StarMine
data. Investors will be looking to see if there has been a marked decrease in the number of
deals greater than $1 million, a factor that has the potential to affect the company's results.
Software maker VMware Inc is expected to, on Tuesday, report first-quarter profit below analysts
average estimate, according to Thomson Reuters StarMine data. Investors will be looking for
growth in new businesses, such as NSX, which makes networking more efficient.
Mattel Inc, on Wednesday, is expected to post a first-quarter profit that tops analysts'
estimates, according to Thomson Reuters StarMine data. The toymaker is in the middle of a
turnaround as its Barbie dolls have fallen out of favor with young girls. The 56-year-old brand
posted a rise in sales in the holiday quarter after eight straight quarters of declining sales.
But analysts expect sales to fall this quarter. Investors will look for forecast and commentary
on sales for the second quarter.
AutoNation Inc, the biggest publicly traded auto dealer group, reports first-quarter results on
Friday. CEO Mike Jackson is likely to speak on the auto industry in general and whether
automakers are hurting themselves by increasing profit-eating incentives in order to top last
year's record for U.S. auto sales. AutoNation has also long been aggressive in share buybacks,
so investors will look for an update on its share repurchase program.
Sportswear maker Under Armour Inc is expected to report first-quarter profit below analysts'
estimates on Thursday, according to Thomson Reuters StarMine data. Under Armour's gross margin
in the quarter is expected to have been hit by higher promotions to clear excess inventory and
slowing apparel sales growth, the company's largest source of revenue. A fall in the average
price of its running footwear and a shift in sales mix towards lower-margin footwear are also
expected to hurt margins. Investors will look for an update to the forecast, inventories, and
comments on the Sports Authority bankruptcy.
Mexican cement company Cemex SAB de CV reports first-quarter results on Thursday. Investors will
be looking at the impact of the peso depreciation on its debt load as well as any recovery in
its U.S. business.
Canadian Pacific Railway Ltd is expected to report a first-quarter profit on Wednesday, as
Canada's second-largest railroad continues to streamline operations despite pressure on volumes
from falling prices for commodities such as oil and coal. Chief Executive Hunter Harrison is
expected to face questions from shareholders on the company's decision to abandon its $28
billion bid for U.S. railroad Norfolk Southern.
Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins come before the
House of Commons Standing Committee on Finance on Tuesday and before the Senate Standing
Committee on Banking, Trade and Commerce on Wednesday. Lawmakers are likely to press them on the
strength of the Canadian economy and the appropriate level for the Canadian currency.
The two main economic reports in Canada next week will be inflation and retail sales, both due
on Friday. The annual inflation rate is expected to have cooled to 1.2 percent in March,
drifting further away from the Bank of Canada's target of 2 percent. Core inflation, which
strips out volatile items and is more closely watched by the bank, is forecast to be a more
robust 1.7 percent. Retail sales are expected to have fallen by 0.8 percent in February after
strong gains last month. Analysts are expecting to see a pullback after the economy got off to a
robust start at the beginning of the year and will be looking at the retail figures to see how
the economy is faring.
Canadian Infrastructure Minister Amarjeet Sohi will speak on Tuesday about the role
public-private partnerships will play in the government's C$120 billion 10-year infrastructure
plan. Government officials say they are talking to the country's largest pension funds about
investing in billions of dollars worth of infrastructure projects to help stimulate the economy.
Canadian province Manitoba holds its 41st general election on Tuesday. The long-ruling New
Democrat government led by Greg Selinger is expected to lose power in the Western Canadian
province known for crop production and manufacturing. The progressive Conservatives are leading
the polls and will likely put greater emphasis on curbing the province's deficits.
Mexico releases inflation data for the first half of April on Friday. The country's inflation
rate cooled in March to an annual rate of 2.60 percent, but the central bank has said that it
expects the pace of consumer prices to rise slightly above its 3 percent target during the
second and third quarters. Still, there has been little sign of widespread pressures on consumer
prices despite a steep devaluation of the peso since late 2014.
European Central Bank (ECB) holds interest rate decision on Thursday. In the euro zone,
economists said lacklustre demand, not inadequate credit, is holding the euro zone economy back.
They say the ECB is unlikely to cut its deposit rate further from the current -0.40 percent.
That too underscores the diminishing returns from monetary policy, especially since the ECB is
well over a year into its trillion-plus euro stimulus programme, has cut rates several times and
pledged long-term loans to banks, with little pick-up in inflation so far.
ON MONDAY, APRIL 18
Morgan Stanley's first-quarter profit is expected to have plunged during what is widely being
considered the worst start to the year for global banks since the financial crisis in 2007-09.
Revenue from both investment banking and trading are likely to have taken a hit amid worries
about economic growth in China, stubbornly low oil prices and uncertainty surrounding the pace
of U.S. interest rate hikes. Shares in Morgan Stanley will be sensitive to details on the bank's
exposure to energy loans, outlook on deals, IPOs and trading for the rest of 2016.
PepsiCo Inc is expected to report first-quarter revenue above the average analyst estimate,
according to Thomson Reuters StarMine data. Demand for Pepsi's snacks and non-carbonated drinks
have boosted sales in the United States, but a strong dollar has reduced the value of sales from
overseas markets, which account for 40 percent of the company's total revenue. Investors will
look out for any updates to forecast, comments on acquisitions and any reaction to a potential
law in the United States to tax some sugar-based products.
International Business Machines Corp is expected to report a fall in its first-quarter revenue
below analysts' estimates, according to Thomson Reuters StarMine data. It would represent the
16th straight quarter of declining revenue as a stronger U.S. dollar continues to hurt the the
technology services company. The Dow Jones component, popularly known as Big Blue, has enjoyed a
quiet recovery in 2016, with shares rising nearly 10 percent.
Netflix Inc's first-quarter profit is expected to fall more than analysts' estimates, according
to Thomson Reuters StarMine data, as the video streaming company continues to aggressively spend
on international expansion and original content. Subscriber additions, perhaps one of the most
scrutinized Netflix metrics, is likely to get a boost due to the March release of the new season
of popular shows "House of Cards" and "Daredevil". However, investors will be looking out for
Netflix's subscriber forecast for the next quarter, as users paying $7.99 per month for their
subscriptions will see a $2 hike in May, which analysts expect will drive up churn.
National Association of Home Builders releases data on homebuilder sentiment. The NAHB Housing
Market index is likely to have risen to 59 from 58 in April. (1000/1400)
Boston Federal Reserve Bank President Eric Rosengren gives a lecture in New Britain,
Connecticut. Rosengren surprised many investors a couple of weeks ago when the dovish central
banker said that even he expected more aggressive rate hikes than did skeptical investors. He's
expected to elaborate on his policy leanings as he speaks at the Central Connecticut State
University American Savings Foundation Distinguished Lecture Series. (1900/2300) Separately,
Federal Reserve Bank of Minneapolis President Neel Kashkari speaks before the Minnesota Chamber
of Commerce. (1230/1630)
Toymaker Hasbro Inc is expected to report first-quarter profit above analysts' estimates,
according to Thomson Reuters StarMine data. Hasbro's sales are expected to be driven by toys,
based on Star Wars' "The Force Awakens" movie. Investors will look for forecast, mainly on
projected sales from the newly acquired license to sell Disney Princess dolls, and from toys
related to the new Star Wars movie titled "Rogue One."
LIVECHAT - PANAMA PAPERS with "Wachovia Whistleblower" Martin Woods on the broader implications
for money laundering and financial security
Martin Woods, known as the "Wachovia Whistleblower" because of his uncovering of dirty dealings
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for the FSA regulated businesses. He joins the forum to discuss the implications of the recently
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Global Markets Forum, click here bit.ly/1kTxdKD
(Compiled by Sourav Bose in Bengaluru; Editing by Savio D'Souza)